H&W: PCORI Fees are Deductible Business Expenses

In a recent memorandum, the IRS concluded that health insurers and health plan sponsors can deduct the Patient Centered Outcomes Research Institute (PCORI) fees as business expenses. The memorandum stated that the required PCORI fee will be an ordinary and necessary business expense paid or incurred in carrying on a trade or business and, therefore, will be deductible under section 162 of the Internal Revenue Code.

The first PCORI fees must be reported and paid by July 31, 2013, for plan years ending between October 1 and December 31, 2012. For plan years ending after December 31, 2012, the first PCORI fees must be reported and paid by July 31, 2014. The fee must be paid annually up to plan years ending on or before October 1, 2019.

Click here to view the IRS memorandum.

PCORI fees are covered on Compliancedashboard for both fully insured and self-insured plans.